Working parents face rocketing bills for registered childcare with the costs of nurseries, childminders and after-school clubs in England rising by more than inflation for the third year running, according to a national survey from charity Daycare Trust.

For middle income parents it looks like the situation is going to get worse if plans announced by the government this week get the go-ahead. Margaret Hodge, minister for children, said middle income parents who take advantage of all-day childcare at state nurseries should cough up for half of the cost. A parent who opts for a 9.00am to 3.30pm state nursery place will pay for half a day. And if the childcare tax credit is anything to go by, parents who have a joint income of about £30,000 or over will be forced to pay.

In most situations where both parents work they are unable to take advantage of state nurseries. Instead they must look to the private sector for childcare.

A full-time nursery place for a child under two now costs an average of £134 a week - almost £7,000 a year. That's 5% up on last year's figure and equates to nearly a quarter of the average household income of £562 a week.

The typical cost of a full-time place with a registered childminder for a child under two is a little cheaper at £121 a week while, for children aged two and over, a place costs £123 on average at nurseries and £120 with a childminder. For older children, 15 hours a week at an after school club typically costs £35. The highest nursery cost identified in the survey was £338 a week. The costs are such that a working couple with, for example, a one-year old and a three year-old in full-time nursery places, would face an annual childcare bill of £9,798 if they live in the north-west, while their counterparts in the south-east would pay £13,110. Daycare Trust says that parents pay three-quarters of the cost of childcare with the government paying most of the rest plus a small contribution from employers. In 2002, parents in Britain paid £1.8bn to the day nursery industry.

"Affordable childcare for all is crucial to tackle child poverty, to help parents work and train and to raise educational attainment. Quality childcare helps give children a good start in life. The government needs to help all families access quality, affordable childcare near where they live."

In the short term, Daycare Trust is calling on the government to increase help for working parents through improving the childcare tax credit. This is a benefit - an element within the Working Tax Credit - available to households earning up to £30,000 where parents (both in a couple) work at least 16 hours a week and who pay for some form of registered childcare. It can provide help with up to 70% of your childcare costs - the percentage you get depends on your income - subject to maximum limits on the weekly costs you can claim for.

If you pay for care for one child, the weekly limit on costs is £135, so the maximum you can receive (at 70%) is £94.50 a week. If you pay for care for two or more children, the weekly limit is £200 and, therefore, the maximum you can claim is £140.

Daycare Trust points out that working families on lower incomes who get help through the childcare tax credit still have to find at least 30% of the cost of childcare. And there is no extra help for families with three or more children using childcare. The current average award through the childcare tax credit is only £49.83 a week.

So, the charity wants to see improvements to the tax credit:

· Acknowledging that parents with two or more children using childcare face double or more costs

· Reducing the hours the second earner in a couple has to work to qualify for the tax credit

The charity says the government must subsidise places so that every family can access quality childcare at a price they can afford by having a children's centre in every community. A new report by Professor Hilary Land for Daycare Trust and the TUC, argues that the UK should learn from countries like France and Sweden where there are more generous parental and maternity pay and leave systems.

If the government is to meet its target of abolishing child poverty in a generation, Daycare Trust and the TUC say it must aim for a system of childcare whereby all women in training, education or employment can have access to affordable childcare.